HIGH COURT OF SINDH AT KARACHI

 

Suit No.1995 of 2020

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Date                         Order with signature of Judge

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1.         For hearing of CMA No.14426 /2020

2.         For hearing of CMA No.14938 /2020

3.         For hearing of CMA No.14964 /2020

 

Dates of hearing 13.01.2021 & 28.01.2021

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M/s. Salahuddin Ahmed, Shahzad Nizam, Majid Jehangir and Nadeem Ahmed, advocates for the plaintiffs.

 

M/s. Jahanzeb Awan, Shahan Karimi and Adeel Asad, Advocates for the Defendant No.1.

 

M/s. Arshad M. Tayebally, Heer Memon and Abdul Ahad, Advocates for the Defendant No.4.

 

Mr. Ghulam Ali Khan, advocate for defendant No.5.

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SYED HASAN AZHAR RIZVI J:    By this order I intend to dispose of following CMAs:-

(1)       CMA No.14426/2020 filed by the plaintiff under Order 39 Rules 1 and 2 CPC to suspend the operation of Impugned Bid Evaluation Report dated 13.11.2020 and restrain the Defendant No.1 and 2, from awarding and / or implementing the contract in favour of the defendant No.4 i.e. Zhontong Bus Holding Company Limited, China in respect of the Tender No.TS 424844, in relation to Supply of Goods and Performance of Services for the Bus Rapid Transit System of the Orange and Green Lines.

 

(2)       CMA No.14938/2020 filed by the defendant No.1 under Order 39 Rule 4 read with section 151 CPC to discharge / set-aside / modify the ex-parte ad-interim injunctive order dated 14.12.2020, passed on the injunction application of the plaintiffs.

 

(3)       CMA No.14964/2020 filed by the defendant No.4 under Order 39 Rule 4 read with Section 151 CPC to discharge / vacate / set-aside / modify / amend the ad-interim order dated 14.12.2020 passed by this Court on the Plaintiff’s application bearing CMA NO.14426/2020.  

2.         Vide order dated 14.12.2020 on the application of the plaintiffs bearing CMA No.14426/2020 while issuing notices, the defendants were restrained from awarding / implementing contract subject matter of this suit in favour of the Defendant No.4, till the next date of hearing. However, on 18.12.2020 on the applications under Order XXXIX Rule 4 read with Section 151 CPC filed on behalf of defendants No.1 and 4 bearing CMA No.14938/2020 and CMA No.14964/2020, the defendants were allowed to proceed further as per contract already awarded to the defendant No.4. For the sake of convenience, relevant Portion of aforementioned order is being reproduced hereunder:-

“The submissions made by the learned counsel for the defendants No.1 and 4 and the documents i.e. letter dated 11.12.2020 of awarding the contract to defendant No.4 and the order of the Hon’ble Supreme Court as referred to above were not brought to the notice of this Court at the time of obtaining the injunctive order dated 14.12.2020. Issue notice to the plaintiff and the remaining defendants for 11.01.2021 when this matter is already fixed. In view of the above submissions made by the learned counsel for the defendants No.1 and 4 and the directions given by the Hon’ble Supreme Court, as referred to above, the defendants are allowed to proceed further as per contract already awarded to the defendant No.4.

 

3.         Brief facts of the case in nutshell as narrated in the plaint are that the Plaintiff No.1 is a juristic person organized under the laws of the Peoples Republic of China and having a place of business at Lahore Pakistan whereas the Plaintiff No.2 is a local agent of the plaintiff No.1. Defendant No.1 is an instrumentality of the Government of Pakistan in that the majority of its shares and the majority of the members of its Board of Directors are the nominees of the Federal Government. Defendant No.2 is responsible for the overall management of the business of the defendant No.1. Defendant No.3 is a committee formed under Rule 48(1) of the Public Procurement Rules, 2004 by the defendant No.1. Defendant No.4 is a juristic person organized under the laws of Peoples Republic of China and operating in Pakistan also. On 22 June, 2020 the defendant No.1 vide advertisement on its website sought request for proposal (the “RFP”) alongwith the Instructions to Bidder (“ITB”) in relation to Tender No.TS 424844, inviting bids in relation to Supply of Goods and Performance of Services for the Bus Rapid Transit System of the Orange and Green Lines (the “Project”) from the respective bidders. Defendant No.1 conducted an international competitive bidding process for inviting bids under Single Stage – Two Envelop procedures. Procedure in accordance with ITB No.4.5 the bidders were required to examine the requirements of the RFP and ITBs and to submit a complete bid comprising of all the documents prescribed in ITB. ITB 13.5 reads as under:-

“13.5  Any Bid not accompanied by a compliant Big Security (as exclusively determined by the Employer) shall be rejected by the Employer as non-responsive and a Bidder shall not be allowed to submit Bid Security at a later stage” (emphasis added)  

 

4.         Pursuant to ITBs No.13.1 and 13.2, the prospective bidders were required to submit bid security in the form of Form 3 equivalent to two percent (2%) of the bid price:-

 

“13.1  The Bidder shall furnish, as part of its Bid, a Bid Security equivalent to two (2) percent of the Supply Price (the “Bid Security”).

           

 

13.2      The Bid Security shall be an irrevocable, unconditional and an-demand bank guarantee in the form attached as Bidding Form F3, having a Minimum Credit Rating at all times, acceptable to the Employer”

 

5.         Further, the prescribed Bidder Form 3 (form of Bank Guarantee), in turn, provided that a demand / call on the bid security is valid / honored by the guarantor if it is sent through an authenticated SWIFT instructions by the defendant No.1’s bank to the bank of the defaulting bidder:-

 

“.. .. a Demand shall only be honored by us [the Guarantor]; (i) in the case of a written Demand, if it is made by and bears the signature of an authorized officer or other representative of the Employer; or (ii) in the case of a Demand transmitted through SWIFT, if  it is transmitted through authenticated SWIFT instructions by the Employer’s bank (i.e. National Bank of Paksitan) (emphasis added)”.

 

6.         ITB No.13.6 specifically required the bidders to submit original bid security with the bids with the defendant No.1 and ITBs No.15.1, 15.2 and 16.2, generally, required the bidders to submit bid documents in original. ITB No.13.6 reads as follows:-

 

“13.6  Any Bid not accompanied by a Bid Security, which is, in the sole discretion of the Employer, substantially compliant with the requirements of these Bidding Documents, shall be rejected by the Employer as non-responsive, Bidders are required to submit with their original proposals the original Bid Security. The Employer shall reject a Bid if a photocopy of original Bid Security is attached with the Technical Proposal and such Bid shall not be further examined.”

 

7.         Further, the Pre-Bid meeting was held on 07 July 2020 in response to the queries raised by the prospective bidders, including the plaintiff, the defendant No.1 extended the bid submission deadline initially to 12 August 2020 and subsequently further extended it to 20 August 2020 in terms of the advertisement. As per Pre-Bid meeting’s minutes, the defendant No.1 relaxed the condition of notarization and attestation by Pakistan Embassy / Consulate of the bid security in the case the bid security was issued outside Pakistan in response to the request of the prospective bidders. Plaintiffs and defendant No.4 submitted their respective bids with the defendant No.1. Plaintiff submitted its bid security in the shape of a guarantee from Bank of China Ltd., Fujian Branch, China, through original SWIFT message duly authenticated and endorsed by advising the bank namely Standard Chartered Bank, Lahore. Copy of the bid security submitted by the plaintiff is enclosed as annexures “F/1 and F/2” with the plaint.

 

8.         The case of the plaintiff is that on 09.09.2020 the defendant No.5 vide its letter enclosed as annexure “G” with the plaint for the first time attached the original bank guarantee issued by China Construction Bank Corporation on behalf of the defendant No.4 (in the form of SWIFT instructions) and authenticated / advised the same. Case of the plaintiff as pleaded in the plaint of the plaintiff is that the original authenticated bid security on behalf of the defendant No.4 was submitted after expiry of the extended bid submission deadline of 20 August, 2020. On 14 October 2020 the defendant No.1 declared the plaintiffs and defendant No.4 as technically responsive vide letter enclosed as annexure “H” with the plaint. On 16 October, 2020  the defendant No.1 opened the financial proposals of the bids submitted by the bidders including the plaintiff and the defendant No.4. Case of the plaintiff is that the defendant No.4 submitted photocopy of the bid security with the defendant No.1 in the form of unauthenticated SWIFT transmission. Plaintiffs by several letters communicated with the defendant No.1 protested for the submission of the photocopy with the bid and submission of original bid security after the extended bid submission deadline was violative of ITBs as well as applicable laws. Copies of the plaintiffs’ letters to the defendant No.1 are enclosed as annexures “I/1 to I/3” with the plaint. Defendant No.1 responded to the plaintiffs’ letters on 26 October 2020, copy thereof is enclosed as annexure “J” with the plaint. Plaintiff communicated the violations through letter dated 04 November, 2020 and 16 November, 2020 to the defendant No.6 and requested to intervene in the matter. Defendant No.6 called report / comments from the defendant No.1 in terms of Rule 16(1) of the Public Procurement Rules, 2004. Defendant No.1 on 13 November, 2020 announced / made public the Bid Evaluation Report (the Impugned Bid Evaluation Report”) on the approval of the defendant No.2 and the defendant No.1 evaluated the defendant No.4’s bid as the lowest evaluated bid. Copy of Impugned Bid Evaluation Report is enclosed as annexure “M” with the plaint. On 19.11.2020 through letter plaintiff requested the defendant No.1 to confirm constitution of the defendant No.3 in terms of Rule 48(1) of the Public Procurement Rules. On 24.11.2020 the plaintiff filed a complaint with the defendant No.3. On 27.11.2020 Notification for constitution of Grievance Redressal Committee / defendant No.3 issued. On 30.11.2020 the defendant No.1 communicated the plaintiff hearing of the complaint on 03.12.2020. Plaintiff objected to the constitution of the defendant No.3 on the ground that it should not consist of the same persons i.e. members of the defendant No.2, who had already ruled against the plaintiff. On 10.12.2020 the defendant No.3 decided the complaint with the following observations:-

 

“Finally, in view of the above arguments, GRC hereby decides that the complaint lodged by M/s. Xiamen Golden Dragon is devoid of any merit. The management is accordingly directed to conclude the procurement process under provisions of the Public Procurement Rules, 2004”.

 

9.         I have heard learned counsel for the parties and perused the material available on record coupled with case laws cited by the learned counsels with their assistance.  

 

10.       Learned counsel for the plaintiff submitted that the evaluation of the incomplete bid of the defendant No.4 by the defendant No.1 and the receipt of original authenticated bid security of the defendant No.4 after the extended bid submission deadline by the defendants No.1 and 2 and the impugned Bid Evaluation Report are mala fide and without jurisdiction. Per learned counsel for the plaintiff, the impugned actions and the impugned Bid Evaluation Report are palpably unjust, without lawful authority and jurisdiction, illegal, void ab-initio and violative of, inter alia, Articles 4, 10A, and 25 of the Constitution of Islamic Republic of Pakistan as well as violative of Rules 4, 20, 21, 28(2), 30, 31 and 38 of the Public Procurement Rules, Clauses 13.2, 13.5, 13.6, 13.10, 16.6, 18.1, 18.2 and 22.3 of ITB  are unfair an non-transparent. Per learned counsel, the defendants violated even the ICC Uniform Rules for Demand Guarantees (URDG 758). Learned counsel for the plaintiff urged that the defendant No.4’s bid was not accompanied the original bid security and that the original and authenticated bid security was submitted after the extended bid submission deadline amounted to hiding of damaging information rendering the evaluation process non-transparent and unfair. Learned counsel for the plaintiff has referred to Clause 13.6 of ITB, which requires submission of original bid security by a bidder. He also placed reliance upon Clauses 18.2 and 13.5 of ITB read with Rule 28(2) of the Public Procurement Rules envisages rejection of bid by the procuring agency if not submitted within the prescribed bid submission deadline. Learned counsel for the plaintiff contended that the NBP provided original authenticated security to the defendant No.1 on September 9, 2020 whereas the extended submission deadline was August 20, 2020. Per learned counsel for the plaintiff, the defendant No.4’s bid is liable to be rejected. Learned counsel for the plaintiff further contended that the defendant No.1 being public sector entity is failed to act fairly and justly and impugned actions of the defendant No.1 are malafide and without jurisdiction. Per learned counsel, Rule 48 of the Public Procurement Rules 2004 is beyond the scope of its parent Statute and the said rule is ultra vires and is liable to be declared as such by this Court. Per learned counsel, remedy under Rule 48 is inefficacious and illusory in nature as the same persons responsible for accepting the defendant No.4’s bid  were appointed to review the plaintiff’s grievance. Per learned counsel for the plaintiff, as no appellate forum or court has been specified or designated against its decision therefore, present suit is only appropriate remedy.  Learned counsel for the plaintiff has placed reliance upon the case of Otsuka Pakistan Limited Vs. Province of Sindh 2020 MLD 185 (Sindh), Gemalto Middle East FZ-LLC Vs. FoP 2020 CLD 151 (Islamabad), M. Ayub and brothers Vs. CDA PLD 2011 Lahore 16 and Suo Moto Case No.5 of 2010 reported in PLD 2010 Supreme Court 731. 2012 CLD 1734, 2016 PLD Sind 479, 2014 YLR 1366, 1974 SCMR 356 and PLD 2017 Lahore 802.

 

11.       Learned counsel for the defendant No.1 submitted that admittedly out of all the bidders, the plaintiff secured the lowest marks in the technical evaluation and is an unsuccessful bidder. He further submits that the plaintiff has a history of supplying dangerous / defective buses and has referred the incidents that have taken place on the Peshawar BRT Project where several buses caught fire and the passengers had to be evacuated under distress. He further submitted that the Peshawar BRT Project is under NAB investigation. Learned counsel for the defendant No.1 further submitted that the plaintiff’s bid is approximately PKR 25 Crores (Rupees Two Hundred Fifty millions) higher than the bid of the Lowest Evaluated Bidder i.e., the defendant No.4, who is already declared successful. Learned counsel for the defendant No.1 stated that the Bid Bond submitted by the plaintiff was not in conformity with the format prescribed by the defendant No.1. The prescribed format required a letter from the Guarantor Bank directly to the Employer (defendant No.1) whereas the plaintiff only submitted an advice from a Bank in Pakistan. Per learned counsel for the defendant No.1 the plaintiff’s own bid would thus be construed as non-responsive and therefore, the case of the plaintiff must fail. Learned counsel for the defendant No.1 then argued that Ghulam Ali Khan learned counsel for the defendant No.5 / NBP was present before this Court and he confirmed at the time of his arguments that the National Bank of Pakistan received SWIFT instructions/message on 11.08.2020 from the Chinese Bank of the of the defendant No.4 the Successful Bidder. Learned counsel for the defendant No.1 urged that there is no allegation from the plaintiff of any technical or financial impropriety or financial irregularity or any allegation of corruption in the process. Hence, the case law cited by the learned counsel for the plaintiff is distinguishable and not applicable in the present case. Learned counsel for the defendant No.1 has referred to an order dated 29.12.2020 passed by the Honourable Supreme Court of Pakistan whereby the Court directed the defendant No.1 to complete and operationalize the project by June, 2021. Per learned counsel for the defendant No.1 aforesaid order was in continuation of an earlier order passed by the Honourable Supreme Court of Pakistan wherein the defendant No.1 undertook to complete entire mass transit project by March, 2021. The Honourable Supreme Court of Pakistan recorded in the orders, as referred to above, that no further time shall be granted. Per learned counsel for the defendant No.1, the defendant No.1 has executed legally binding supply contracts with the defendant No.4, it has received Performance Bond (amounting to 10%) from the defendant No.4, the L/C has been established with the approval of the State Bank of Pakistan and the advance payment has been released as well. Per learned counsel for the defendant No.1, the defendant No.1 acted impartially, neither nexus with the plaintiff nor with the defendant No.4/successful bidder with whom defendant No.1 has already executed binding bus supply contracts for Green and Orange Lines on 24.12.2020. Per learned counsel, the defendant No.1 has chosen a party that is technically superior to the plaintiff whose bid is cheaper by approximately 25 crore rupees (Rupees Two Hundred Fifty millions). Learned counsel for the defendant No.1 urged that defendant No.1 has wholly followed Rule 4 (Principles of Procurement) and Rule 2(1)(h) of the Public Procurement Rules, 2004. Per learned counsel for the defendant No.1, the defendant No.1 has adopted the procurement process based on the foregoing principles and more importantly the interest of the national exchequer has been fully protected. He further contended that as per Rule 30 of the PPRA Rules, 2004 all bids submitted to the employer were evaluated, where after in terms of Rule 31 the employer was permitted to seek clarification from the bidders that do not change the substance of the bid. In terms of Rule 34, the employer shall announce the results of the bid evaluation in the form of a report at least 10 days prior to the award of the contract. Learned counsel has referred to pre-bid meeting dated 23.07.2020 on the request of the prospective bidders, the foregoing requirement was waived in the following terms:-

“Where the bid security is issued by a foreign bank outside Pakistan, then both the instrument and the issuing bank are required to meet the acceptable international credit rating (as defined in the RFP document) and where the bid security is issued via swift, then the same may be submitted (alongwith the bid) without requiring the same to be notarized, and/ or attested.   

 

12.       Learned counsel for the defendant No.1 submitted that the bid bond of the defendant No.4 as part of its financial proposal opened on 16.10.2020 was duly stamped by the guarantor bank and the text was identical to the prescribed form F3. Furthermore, the bid bond submitted by the defendant No.4 through SWIFT message clearly reflected that it was issued on 10.08.2020 and received by the NBP / defendant No.5 on 11.08.2020 as is unambiguously clear from each and every relevant document those are already placed before this Court. Learned counsel for the defendant No.1 has placed reliance upon the case of the Pakistan Gasport Vs. Sui Sourthern Gas Company Ltd (PLD 2016 Sindh 207), the case of M/s. Kuwait National Real Estate Company (Pvt)., Ltd., Vs. M/s. Educational Excellent Ltd., an another (2020 SCMR 171), the case of A.M. Construction Company (Pvt) Ltd., Vs. National Highway Authority (2017 CLD 178).

 

13.       Learned counsel for the defendant No.4 submitted that the defendant No.4 is a leading business manufacturer hailing from China with total assets valued at RMB 12 billion and is an expert in the industry of bus manufacturing for the post 40 years. Per learned counsel, the defendant No.4 has been dedicated to the research of safety, energy saving, and new energy technologies of buses with more than 100 patents and has obtained more than 50 domestic and international award. It introduced advance European bus manufacturing technology and developed a series of buses leading the Chinese bus industry by cover highway buses, public buses, tourist buses, school buses, RV, including 5.5m light buses to 18m luxury buses, 13 series and 260 models in total. Learned counsel for the defendant No.4 further submitted that the recent development and promotion of the Mass Transit System in Pakistan, the defendant No.4 has ventured into the Pakistani market to offer its expertise and quality products and has also partnered with a renowned automobile and parts manufacturers Al Haj Group of Companies. Per learned counsel, the defendant No.4 participated in the subject tender, floated by the defendant No.1 to procure supply of goods and performance of services for the Bus Rapid Transit System of Orange and Green Lines in Karachi. Per learned counsel for the defendant No.4, the defendant No.4 submitted their technical and financial proposals well before the closing date and in compliance of the defendant No.1’s instructions the defendant No.4’s financial proposal was accompanied by a Notice of the Letter of Guarantee / Standby Letter of Credit, undercover of which was a SWIFT message dated 10.08.2020 transmitted by China Construction Bank Corporation to the defendant No.1’s designated bank i.e. national bank of Pakistan. The SWIFT message clearly establishing that a Bank Guarantee had been executed on 10.08.2020 by the defendant No.4 in favour of the defendant No.1 through China Bank for the sum of USD 600,000/- payable on sight and immediately upon receipt of the defendant No.1’s first written demand. Per learned counsel for the defendant No.4, the defendant No.4 submitted valid bid security under the terms of the ITB read with the clarification / response provided by the defendant No.1, which was applicable to all the bidding parties equally, including the plaintiff. However, after a thorough due process, the defendant No.1 has found the defendant No.4’s bid (including the Bid Security) to be responsive to the Tender and no deficiencies have been pointed out. Per learned counsel for the defendant No.4, the SWIFT message is an electronically generated mode of communication between banks and financial institutions which does not necessarily have an original or copied form. It is in an electronic form and considered to be valid document having legal recognition under the “Electronic Transaction Ordinance, 2002”. Learned counsel for the defendant No.4 urged that SWIFT message transmitted by China Bank to the NBP wherein it is clearly mentioned that date of issue and execution of the Bank Guarantee is 10 August, 2020. Per learned counsel, the NBP letter dated 09th September, 2020 itself is not a Bank Guarantee and neither was the SWIFT message subject to NBP sending any such letter. Learned counsel for the defendant No.4 urged that even in the bid security SWIFT message date and time of the message is mentioned at the top left side as 11.08.2020 at 05:31:41 and endorsement seal of the NBP Swift Centre is of 11.08.2020. Subject SWIFT message was generated from China on 10.08.2020 to the NBP / defendant No.5. That document is enclosed alongwith letter of NBP dated September 09, 2020 as annexure “I” at page-711 alongwith affidavit in support of CMA No.14964/2020. Learned counsel for the defendant No.4 contended that the plaintiff filed complaint before the defendant No.3 malafidely without having any basis. Per learned counsel for the defendant No.4, present suit has become infructuous and the cause of action is no longer alive after decision of the defendant No.3 GRC dated 11.10.2020 and subsequent Notification of Award of Contract dated 11.12.2020.

           

14.       Learned counsel for the defendant No.5 / NBP stated that the swift message was issued and generated on 10.08.2020 in respect of the bid bond of the defendant No.4 was received to the National Bank of Pakistan / defendant No.5 on 11.08.2020.

           

15.       First of all I would like to make my observation on the main and technical points of the matter. Learned counsel for the plaintiff has argued that the defendant No.1 has shown undue haste by awarding the contract to the defendant No.4 on 14.12.2020. In terms of Rule 48(2) a bidder may file a complaint with the Grievance Redressal Committee within fifteen (15) days’ time of the announcement of the evaluation report. Moreover, Rule 48(4) provides that mere filing of the complaint shall not warrant a suspension of procurement process. However, in interest of fairness and transparency, the Grievance Redressal Committee passed a stay order on filing of the complaint. Therefore, in order to meet the timelines set by the Honourable Supreme Court of Pakistan it was incumbent upon the defendant No.1 to expedite the process. Further learned counsel for the plaintiff has referred to provisions of ICC Uniform Rules for demand Guarantee (URDG 758). The said provisions are only in relation to the encashment of a guarantee whereas in the instant case there is no question of encashment since the Bid Bonds were returned to the bidders and a performance bonds have been received from the successful bidder i.e. defendant No.4.

 

16.       Main objection raised by the learned counsel for the plaintiff is that against the instructions, in violation and against the several clauses of ITB, the defendant No.4 has failed to produce original bid security, which is to be filed per learned counsel on 20.08.2020 but as per letter of the NBP dated 09.09.2020 available at page-283 with the plaint in para-2 thereof, the same for the first time was produced on 09.09.2020. Per learned counsel, on 20.08.2020 the bid submitted by the defendant No.4 was accepted as original bank guarantee was enclosed at the time of closure. Learned counsel for the plaintiff has referred to Article 14(c) of the ICC Uniform Rules for Demand Guarantees (URDG 758) enclosed at page-829 with the plaint and relevant portion thereof reads as under:-

 

“14(c). Where the guarantee indicates that a presentation is to be made in electronic form, the guarantee should specify the format, the system for the data delivery and the electronic address for that presentation. If the guarantee does not so specify, a document may be presented in any electronic format that allows it to be authenticated or in paper form. An electronic document that cannot be authenticated in deemed not to have been presented”.

 

 

17.       Learned counsel for the plaintiff urged that the Grievance Redressal Committee passed order on 10.12.2020 and per learned counsel order was dispatched on 11.12.2020. However, on the same date award of the subject contract was given to the defendant No.4. Present suit was filed on 11.12.2020 and at the relevant time order passed by the Grievance Redressal Committee was not communicated to the plaintiff, this conduct of the defendant No.1 is showing its collusion with the defendant No.4. Learned counsel states that substantial compliance has not been done by the defendants No.1 and 2. He has placed reliance upon the cases reported in 2017 Lahore 802 and 2020 MLD 185. For the sake of convenience here I would like to quote Rules, 3 & 5 (Chapter-2)  and Rule-14 (Chapter-3) of the Electronic Transactions Ordinance, 2002 available at page-251 (in part-2), which reads as under:-

            “CHAPTER 2”

            RECOGNITION AND PRESUMPTION              

 

“3.       Legal recognition of electronic forms.—No document, record, information, communication or transaction shall be denied legal recognition, admissibility, effect, validity, proof or enforceability on the ground that it is in electronic form and has not been attested by any witness.   

 

5.         Requirement for original form.—(1) The requirement under any law for any document, record, information, communication or transaction to be presented or retained in its original form shall be deemed satisfied by presenting or retaining the same if;

 

(a) there exists a reliable assurance as to the integrity thereof from the time when it was first generated in its final form; and

 

(b) it is required that the presentation thereof is capable of being displayed in a legible form.

 

 

“CHAPTER 3”

ELECTRONIC DOCUMENTS

 

14.       Acknowledgement of receipt.—(1) Unless otherwise agreed where the originator has stated that the electronic communication is conditional or receipt of acknowledgment, the electronic communication is treated as though it has never been sent, until the acknowledgment is received.

 

 

18.       On perusal of record it is found that the SWIFT message was received on 11.08.2020 to the NBP / defendant No.5 in its Swift Centre at Karachi. This fact is authenticated by the NBP / defendant No.5 in their letter dated 09.09.2020 wherein details of SWIFT message viz. receiving date and time was mentioned. The China Construction Bank Corporation Liaocheng Branch, No.78 West Dongchang Road, Liaocheng Shandong Prov. China sent message Type:AK760 received by the National Bank of Pakistan / defendant No.5. SWIFT message issued on 10.08.2020 in respect of Guarantee No.SDC02LG000001200 executed on 10.08.2020, the bidder name was mentioned Zhongtong Bus Holding Co. Ltd., guaranteed amount US$ 600,000.00 (Six Hundred Thousand in US Dollars only) through its Bank Guarantee the Guarantor undertook irrevocably and unconditionally on demand to pay to Sindh Infrastructure Development Company Limited (the Employer) / defendant No.1, without any  notice, reference or recourse to the Bidder (defendant No.4) or to any other entity or without any recourse or reference to any document, agreement, instrument or deed, any sum or sums (or any part thereof) equivalent in aggregate upto but not exceeding a maximum amount of (USD) (600,000 USD)/- as sight and immediately upon the receipt of the Employer’s / defendant No.1’s first written demand (the Demand) at the Guarantor’s offices or through SWIFT instructions transmitted by the employer’s bank (i.e. National Bank of Pakistan), on behalf of the Employer, to the Guarantor.     

 

19.       Admittedly, the defendant No.1 completed bidding process defined as international competitive bidding process by inviting bids under Single Stage –Two Envelope Process under the Public Procurement Regulatory Authority Rules, 2004 for eighty (80) 18-meter articulated hybrid-buses and twenty (20) 12-meter hybrid-buses for the Green and Orange Line BRTS Project. Vide letter dated 14.10.2020, the defendant No.1 notified all four bidders including plaintiff and defendant No.4 that their bids had been declared technically responsive against the evaluation criteria and the Financial Proposals submitted by the bidders will be opened on 16.10.2020 in the presence of the representatives of the bidders. On the same date the financial bids of the four technically responsive / qualified bidders were opened on 16.10.2020 when the defendant No.4 emerged as the successful party and was declared to be the lowest evaluated bidder therefore, defendant No.1 issued Bid Evaluation Report on 13.11.2020, which confirmed that the defendant No.4 had the lowest evaluated cost. Bid Evaluation Report illustrates that the plaintiff had the lowest technically evaluated score of 74 of 100 whereas the technical score of the defendant No.4 was 92 of 100. Bid Evaluation Report is enclosed as annexure “F” at page-685 with CMA No.14964/2020. Relevant portion of the report is as under:-

 

 

Name of Bidders

 

                   Marks

Technical               Financial

 

Evaluated

Cost

(USD)

Rule/Regulation

/SBD*/ Policy Basis for I Rejection/ Acceptance as per Rule35 PP Rules,2004

1

M/s Beiqi Foton

Motor Co. Ltd.

84.5/100

-

 

30,499,064

Meeting All Criteria (Qualified)

 

2

Ws Xiamen

Golden Dragon

Bus Co. Ltd

74/100

-

29,588,406

Meeting All

Criteria (Qualified)

 

3

M/s Zhengzhou Youtong Bus Co. Ltd.

 

100/100

-

30,186,601

Meeting All

Criteria (Qualified)

 

4

M/s Zhongtong Bus Holding Co. Ltd.

 

92/100

-

28,116,200

Meeting All

 Criteria (Qualified)

 

Lowest Evaluated Bidder: M/s Zhongtong Bus Holding Co. Ltd.

 

20.       Following the aforementioned report, the defendant No.4 was invited by the defendant No.1 vide its letter dated 16.11.2020 to finalize the contract negotiation and such process was under progress the defendant No.4 was served with the Notification dated 27.11.2020 issued by the defendant No.1 intimating that a Grievance Redressal Committee had been constituted to heard and decide the Complaint filed by the plaintiff under Rule 48(2) of the PPRA Rules. The Notification was accompanied by the plaintiff’s letter dated 16.11.2020 which inter alia highlights its objection on the opening of the Financial Proposal of the Defendant No.4. In the said letter, the plaintiff alleged that the Bid Security provided by the defendant No.4 is dated 09.09.2020, which is purportedly beyond the expiry of the closing date and that the Bid Security of the defendant No.4 was in a form of a photocopy of the Swift Message issued by the China Bank and addressed to the NBP. After hearing the parties, the GRC on 10.12.2020 gave its detailed and well-reasoned findings / decision in favour of the defendant No.4 and comprehensively responded the objections raised by the plaintiff including the objections referred to above. It was held by GRC that the complaint of the plaintiff does not hold merit for the reason that the SWIFT was explicitly allowed by the defendant No.1 through the pre-bid response and it was further held that the submitted bid security got verified from the National Bank of Pakistan, besides the nature of the submitted Bid Security is unconditional and irrevocable, which fulfills the spirit of the Bid Security.  Relevant paras 10, 11 and concluding paragraph of the decision of the GRC on the complaint is as under:-

 

“10.    To arrive at a judicious decision, the GRC decided to hear the project consultants i.e. M/s. EY (Financial Experts) & M/s. Haider-Mota (Lawyers), and the relevant officer of NBP in-person before the GRC on 8.12.2020.

 

11.       Representative of NBP explained that SWIFT is online tool for any kind of security from one authenticated bank to other authenticated bank. He further clarified that NBP has verified that relevant bid security was submitted by M/s. China Construction Bank via SWIFT on 10.8.2020. He verified that in case of any default, NBP is not responsible to encash the bid security rather NBP will intimate the concerned bank for encashment and according to international law, bidders’ bank must encash the respective bid security in due course of time. He further clarified that NBP has not issued a Counter-Guarantee, which was not required by the procuring agency. Mr. Huzaifa, Partner M/s. EY has submitted that the Bid Security provided by M/s. Zhongtong is a valid instrument as sought by SIDCL in the subject procurement. Mr. Ali Akbar (M/s. HMCO) provided the legal assistance on ITB clauses and opined that the Bid Security is valid being issued via SWIFT and verified in person in NBP by CFO SIDCL, Mr. Huzaifa (EY) and Advocate Hamza (HMCO) as being transmitted on 10.08.2020. He further opined that the Procurement Committee of the BOD was within its powers under the subject procurement to accept the Bid Security as a complaint instrument.    

 

            Decision of GRC

 

14.       The Committee afforded due opportunity of hearing to the parties, examined the relevant record, read the respective documents produced by the parties, consulted the experts, deliberated upon the process and decided the matter as under:

 

 

i.                    For the arguments on constitution and impartiality of GRC, the Committee heard the parties as per arguments listed above (Para 5 above). The Committee decided that there is no conflict of interest as GRC is constituted of members not concerned with procurement committee. Besides, the technical, legal and administrative competence of the GRC as approved by the BOD, is appropriate. Further, the BOD's approval constituting GRC is with proper powers and authorizations to decide upon the grievance complaints.

 

 

ii.                 For the arguments on hearing all the parties (Para 6 above), the GRC did its due diligence and accorded due opportunity of being heard to all the parties.

 

iii.               For interim Stay restraining SIDCL to award prior to decision of GRC (Para 7 above), the relief was granted to the complainant and accordingly directions to SIDCL were conveyed.

 

iv.                For arguments concerning the Bid Security's validity (Paras 8, 9, 10 & 11 above), GRC examined the authorities, RFP/ITB's, listened to arguments of the parties, heard the experts and deliberated within the GRC members. The GRC concluded that the complaint doesn't hold merit for the reason that SWIFT was explicitly allowed by the procurement agency in the pre-bid response documents for all the prospective bidders and the submitted Bid Security got verified from the National Bank of Pakistan. Besides, the nature of the submitted Bid Security is unconditional and irrevocable, which fulfills the spirit of seeking Bid Security.

 

v.                  The Committee noted that the process has been fair & transparent, which attracted four (4) out of top ten (10) manufacturers which speaks of superiority of a successful procurement process. The same is also not contested by the complainant.

 

vi.                Further, M/s. Zhongtong Bus Holding Company Limited has secured higher technical score (92%) with the lowest price within the approved budget. The complainant was given the fair opportunity to quote his best price and compete on merits.

 

vii.             Finally, in view of the above arguments, GRC hereby decides that the complaint lodged by M/s. Xiamen Golden Dragon is devoid of any merit. The management is accordingly directed to conclude the procurement process under provisions of the Public Procurement Rules, 2004.

 

 

21.       Furthermore, the Grievance Redressal Committee has decided the complaint of the plaintiff with a speaking decision, referred to above, so also each and every aspect of the matter including the objections of the plaintiff were dealt with in accordance with law even the plaintiff, at the time of filing the instant suit on 11.12.2020 and even thereafter did not bring on record the decision of GRC despite the same was announced on 10.12.2020 (prior to filing of the instant suit) and before the GRC the plaintiff was represented by its representative, which also shows the malafide of the plaintiff in approaching to this Court with unclean hands by suppressing the material / important fact. The decision of the GRC was placed by the defendant No.4 on record alongwith their CMA No.14964/2020 on 18.12.2020.  It would not be out of place to mention here that no appeal has been filed by the plaintiffs under Section 48(5) of the Public Procurement Rules 2004 and they directly approached to this Court after the decision of the Grievance Redressal Committed dated 10.12.2020.  

22.       Before interfering in a tender or contractual matter, the  court  should  pose  to  itself  the  questions  whether  the  process  adopted  or  decision  made  by  the  authority  was  mala  fide  or  intended  to  favour  someone;  or  whether the  process adopted or decision made was so arbitrary and irrational that the court could say that the decision was such that no responsible authority acting reasonably and in accordance with relevant law could have reached the same,  and whether the public interest was affected. If the answers to the said questions were in negative, then there should be no interference by court. In the present case, the plaintiff has not alleged any bias, favouritism, partiality and / or undue favour against the defendant No.1 in awarding the subject contract to the defendant No.4. Even the plaintiff has not called in question the work, services, technologies of buses and experience of the defendant No.4 in the relevant field and the plaintiff is only challenging the award of contract of the subject project to the defendant No.4 mere on minor technicalities and procedural irregularities in the proceeding.

23.       Delay in implementing the subject project is causing irreparable loss and harm to the citizens of Karachi as the said project is of national interest and would be helpful for the people in worsening and dilapidated condition of transport in the city. Such process for operationalization of Green Line and Orange Line has been dragged for years and cancellation or suspension of the process for minor technicalities and irregularities would not be in the interest of public at large and would cause huge loss to the government exchequer.

24.       The case laws cited by the learned counsel for the plaintiff in my humble opinion are distinguishable from the facts and circumstances of the present case and are not applicable to it. The offer of the defendant No.4 to the subject contract is admittedly Rupees Twenty Five Crore (Rupees Two Hundred Fifty Millions only) lessor than the offer made by the plaintiffs. Plaintiffs have failed to establish their prima facie case, balance of convenience does not lie in favour of the plaintiffs and no irreparable loss would be caused to the plaintiffs, if injunction application is dismissed.

 

25.       For the foregoing reasons, CMA No.14426/20 filed by the plaintiff under Order 39 Rule 1 and 2 CPC is hereby dismissed and CMAs No.14938/2020 and CMA No.14964/2020 filed by the defendants No.1 and 4 respectively both under order 39 Rule 4 read with Section 151 CPC are allowed. Defendants are allowed to proceed further as per contract already awarded to the defendant No.4 in compliance of order dated 18.12.2020.

 

 

Karachi

Dated : ____________                                                                    JUDGE